Hepatic steatosis, or fatty liver, is strongly associated with metabolic syndrome. Understanding the mechanism of hepatic steatosis will help to prevent and treat this common medical problem. The aryl hydrocarbon receptor (AhR), highly expressed in the liver, is a transcriptional factor originally cloned as a xenobiotic receptor. AhR regulates the expression of xenobiotic enzymes by binding to the dioxin response elements (DREs) present in target gene promoters. Subsequent studies suggest that AhR may also have endobiotic functions by affecting physiology, but the molecular mechanism for the endobiotic function of AhR remains largely unknown. Our preliminary results showed that: (1) Transgenic mice expressing the constitutively activated AhR (CA-AhR) exhibited hepatic steatosis when maintained in chow diet, a phenotype that has been recapitulated in wild type mice treated with the AhR agonist; (2) Activation of AhR in transgenic mice induced the expression of CD36/FAT, a fatty acid transporter important for hepatic fatty acid uptake and steatosis; (3) Activation of CD36 gene expression was also seen in wild type mice treated with the AhR agonist and this activation was abolished in AhR-/- mice; (4) Treatment of human hepatoma cells with AhR agonist induced the expression of CD36 and increased the uptake of free fatty acids; (5) The mouse and human CD36 gene promoters were activated by AhR; (6) Activation of AhR inhibited very-low density lipoprotein (VLDL)-triglyceride secretion; (7) Activation of AhR suppressed peroxisomal fatty acid 2-oxidation; and 8) CA-AhR transgenic mice in third generation of backcross to C57BL/6J showed spontaneous steatosis and signs of compromised glucose tolerance. Based on our preliminary data, we hypothesize that activation of AhR promotes hepatic steatosis through multiple mechanisms, including the activation of fatty acid transporter CD36, suppression of fatty acid oxidation, and inhibition of export of triglycerides. By using the gain-of-function CA-AhR transgenic, loss-of-function AhR-/- and CD36-/-, and AhR ligand-treated wild type mice, we propose four specific aims: (1) To determine whether activation of AhR is sufficient and necessary to induce hepatic steatosis; (2) To characterize AhR-induced hepatic steatosis; (3) To determine whether the fatty acid transporter CD36 is necessary for the steatotic effect of AhR; and (4) To determine the molecular mechanism by which AhR regulates the expression of CD36. To our knowledge, the current study represents the first attempt to determine the pathophysiological role of AhR in hepatic steatosis and associated metabolic abnormalities. The tetracycline inducible AhR transgenic mice, exhibiting fatty liver even when maintained in chow diet, represent a novel, convenient and reversible model of nonalcoholic fatty liver disease (NAFLD). It is hoped that results from this study may help to establish AhR and its target fatty acid transporter as novel therapeutic targets for fatty liver in human patients.